Topic: Mixing your Bitcoin might become illegal in the future - page 2. (Read 958 times)

It's possible to "counterattack" malicious actors on centralized exchanges and centralized wallet providers, because of the single point of failure (in this case, a middleman). However, we cannot say the same about decentralized counterparts. If most people begin using non-custodial mixers and decentralized exchanges, governments will have a hard time trying to enforce the rule of law. That's largely because a decentralized system is not tied to a single jurisdiction. I'd imagine how disastrous everything will be once criminals learn how to efficiently use non-custodial mixers. Governments will have no choice but to declare crypto "illegal" as their efforts become in vain.

Nonetheless, I believe there may be no need to worry about mixers becoming "illegal" in the future. There are many ways to achieve privacy outside the scope of governments and other third parties. This is possible because of the decentralized and open-source nature of crypto/Blockchain. If it were centralized, it would've been easier for governments to enforce the rule of law. I bet non-custodial mixers and privacy-oriented cryptocurrencies will rise like skyrocket once centralized mixing services come to an end. Of course, most people don't care about their privacy since they've got nothing to hide. But for businesses, privacy is crucial to protect sensitive information from prying eyes. Time will tell us the fate of privacy in Bitcoin as it becomes more popular in the mainstream world. Just my thoughts

I am not sure if this is perfectly applicable here. What if you have a bag of 100 USD bills under your bed as savings, all of which once were in possession of a drug cartel?
You really should only be confronted with investigation or even prosecution if there is a reason that can be sufficiently substantiated and attributed to you.
Mixing is no crime from your side if you aren't hiding a crime with it.

A very good reason for the government to regulate Bitcoin from their perspectives, as the main purpose being decentralized government can do anything about it.

But since they'll see that criminals can easily hide their money by means of Bitcoin transactions they'll going to take actions against it.

Countering possible illegal transactions can be done with regulated system, government will requires those exchange business to provide KYC for security reason and countering those criminals and their illegal deeds.

That's certainly true, mate. Before the rise of crypto exchanges, all trades were conducted in a peer-to-peer manner. Mixing is only necessary when you want to obfuscate your Bitcoin transaction activities on the Blockchain. There are other methods of "anonymizing" your Bitcoin without the need to go through a mixer. The real concern is that once governments declare "mixers" as illegal, they can hunt you down if they suspect you're obfuscating your Bitcoin transactions. It wouldn't be worth "anonymizing" your Bitcoin via other means if you get caught in the long run. This will lead you to face fines or even jail time. Knowing that most people don't care about their privacy, a "mixer ban" will do little to no difference in the pioneer cryptocurrency's mainstream adoption.

Nonetheless, the future of crypto is widely unpredictable. We're going to have to see what happens over time as governments devise new regulations that could either stimulate or stifle the growth of the entire crypto/Blockchain industry. The more Bitcoin becomes popular, the more governments and central banks will see it as a threat to the very existence of the current monetary system. Their excuse will always be that crypto serves as the ideal tool for money laundering and tax evasion. They don't care about the legitimate use cases of crypto since they don't want people to use anything outside of their reach. In order to enforce the use of CBDCs (Central Bank Digital Currencies), governments will need to stifle the growth of crypto as much as possible. Mixers will eventually be declared as "illegal", leading us to wonder what will come up next? Just my opinion

It's already the norm. Most exchanges require KYC and what about it?

You can still trade in person, you can still do it using trading groups, you can trade stuff on this forum with no KYC involved. KYC only made it more difficult for newcomers, especially those who value privacy. It did nothing to people who really wanted to trade illegal goods or launder money. They were doing it anonymously outside centralized exchanges before KYC became mandatory.

Mixers have legitimate use cases in the mainstream world. People can use them to preserve privacy in order to prevent other third parties from knowing the account's holdings. Businesses will benefit the most from mixers, as they protect their transaction history from being accessed by malicious actors in cyberspace. Of course, governments don't see it this way. They believe mixers will be solely used for money laundering and tax evasion. We cannot blame them since the majority of people use mixers and privacy-oriented cryptocurrencies for illicit purposes. Considering that most (if not all) mixers don't comply with KYC/AML, governments could shut down them for good in the not-so-distant future. It'll be a much more difficult task to do this with a non-custodial mixer (aka decentralized mixer) though. I guess that governments will hunt down developers of the non-custodial mixer to held them accountable for their actions. With Bitcoin becoming more popular in the mainstream world, mixing will become illegal faster than you could've ever imagined.

Nonetheless, no one knows what will happen in the future. How governments are willing to deal with mixers in the long run is yet to be seen. They could either approve the use of mixers (by forcing KYC/AML) or shut them down for good. In case everything goes down the drain, there's always a "Plan B". Off-chain transactions, privacy-oriented cryptocurrencies (Monero, Zcash, etc.) and non-custodial mixers will help people preserve their anonymity regardless of government regulations. That's because it's practically impossible to take down decentralized services. It shouldn't be long enough before governments admit defeat, giving the "green light" for the growth of the entire crypto/Blockchain industry. Just my thoughts

Well this was expected long time ago, it's just that there are some preventing that happening now but in the end? this will be implemented.

So be ready for the mixing activities because sooner or later you will be needing to present KYC before doing mixing

The problem with mixing though is that there is no other way for it so it can compromise with authorities, for me I wouldn't risk letting mixers loose knowing that they can be used for crimes like money laundering or tax evasions. Think of it like this, there is a bowl of with 100 M&Ms and around 20 of them are poisonous and will kill you instantly, no way to tell if they are poisonous, I am sure that no one is going to risk taking it unless they are suicidal or have a death wish.

It is even understandable that you don't want anyone else to know with whom you are doing business or with whom you are in touch. If you see a doctor and it would be possible to pay with Bitcoin on day, nobody wants that to be stored in the blockchain available for anyone to see and identify you. Even if you just buy a pack of cigarettes or alcohol, there is no point why anyone should be able to fully identify and analyze your behavior.

Let's look at it like this.

Money laundering will always be illegal, regardless of fiat or crypto. You're trying to hide dirty money, that's always a crime today in the past and in the future.

But mixing Bitcoin does not equal money laundering and the mere activity of going into a business and making your money trail more private? That can't ever be a crime. Otherwise our regular use of fiat is wrong.

About "decentralized trading"? Absolutely nothing.
About trading using "centralized tokens"? A lot of things.
For example they could also enforce the same restrictions on the other token including the token itself and the Ether tokens. They can also force the owners of the centralized token or the centralized platform (in this case the ethereum foundation) to freeze or reverse a transaction they deem "illegal" and they would have no choice but to obey.

Mixers are fully centralized correct? Could the person operating the mixing service steal the coins at anytime or is there a way for the guys using the mixer to have a layer of security for themselves?

this is why a lot of governments don't like the mixer services. right now, they have no way of extracting more details from their clients so some prefer to shut them down completely. maybe, in the future, if they found a way how to regulate them in such a way they can prove something of ownership in a case to case basis, maybe mixers will thrive. but right now, their one hope is to do business under jurisdictions that are loose with this kind of restriction, which i believe, there's always be a country or area that will willingly accept this kind of business

As we know governments have always been against this and that is because they want to know every single thing you are doing with your money and they do not like people making an effort of hiding this.

However they are making a false equivalence, they are trying to make it seem as if every single person that is doing that is a criminal and as such they are tying to make the act of mixing your coins illegal, but there are many people that simply do it because they do not want private companies and governments using chain analysis to try to figure out what they are doing with their coins.

If only most countries treated Bitcoin like money. You can't do money laundering if you're mixing something that is not money

With money it's much easier to stop you from doing something illegal, but bitcoin is global in the way that it functions in the same form all around the world. Even if most countries ban mixers there will be a place where they can legally function, even if its a third world country.

Never really liked mixers that much, until I realize that it has some good purposes, for example, how do you handle a situation where someone with lots of bitcoins has his/her coin unfairly blacklisted? I think mixer could help in this case.
 I just hope future mixers would be able to  link the data of mixed coins, which should be immutable, to customers unique ID(decentralized/privacy-friendly ID) . The customers can always provide the data when required by the court or law enforcement agencies.
The data has to be Hidden/Private (accessible only to their owners/customers), and Immutable

humans will always do everything so that they can benefit, those who are greedy will mix in bitcoin for money laundering so that their actions are not known by the police.
if the police already know that many money laundering occurs in bitcoin, it will be difficult for bitcoin to develop because the government will monitor the movement of bitcoin so that no more criminal acts occur in bitcoin.

And if that be going to happen, then it means that the Government will support laundering as you have said? Coz I don't believe that all people who use mixing services are to find guilty of such illegality and I don't think this could get the interest of the authorities to stop this. They just wanted to keep it untraceable, that is the main reason why using it.

If I were the team who were able to found the mixing platform, I think it would be wiser if I kept it a secret, speak with the whales one by one and provide them a private service that will help them with their Bitcoins.

Publishing this actually ruined their very good system as it as now getting a lot of bad impressions and a lot of eyes seeing them as something that has to be stopped.

The only worry the government have with these mixers is that, if this went to a bad hand, this would be very dangerous and it would be hard for them to control the mass.

Finance has been established to control the resources of everyone and of course manipulate it. Having these mixers existence is like, someone is trying to steal some of their market shares that they used to have solo.

Money Laundering would always be there, mixer isn’t a new thing and it is as good as great and talented accountants. So I think this will still be kept existing but will soon become private. Possibly that governments will be the one who would host the services like this soon.

I don't really get any of the governments that does crack down on mixers. Let's say they do, well then just switch over to Monero and period. It is a race that governments can't win. With the technologies advancing on a daily basis I don't how they are ever going to be able to stop anonymous transactions from happening.